Why Homeowner’s Associations Would Be Awesome In A Stateless Society

Everyone hates HOAs, right? Unless they’re rich, retired busybodies who are worried that if your grass exceeds 3.25″ in length, the value of their home is going to plummet like shares in Bear Stearns. And you just know they would call in an airstrike on anyone emitting more than 25dB after 9:00:00.0 pm if they had the power to do so. Of course, they’re also the ones who are most interested in seeking this power over their neighbors, so naturally they are the ones who get themselves elected to General Secretary of their little hamlets. As an aside, that’s pretty much how government works, too. Everyone else is too busy working, tending to their children, minding their own business, and otherwise not being insufferable curmudgeons to want to control an HOA, so that’s what we get. Three people show up to the annual unannounced meeting, two vote for the next petty tyrant, and next thing you know some scowling blue-hair has her driver’s license stuck in your lawn.

Homeowner’s associations are commonly used as an example by libertarians and statists alike as an example both for and against stateless society. On the positive side, libertarians cite them as a great example of how voluntary associations would form in the absence of government, and people could get together and work for their collective (sorry) benefit. Statists, in turn, make a good point when they point to all the petty abuses suffered at the hands of these notoriously capricious organizations. And both seem to be on to something. After all, in any society, even one with no overtly coercive government, if people are engaged in voluntary exchange, and utilize the division of labor, as well they would, hierarchies would emerge. And at what point does a “voluntary” association become not so voluntary at all?

For example, let’s say that the Pine Meadows HOA is particularly abusive. There are stiff fines for leaving your garbage cans out, or for having noisy parties after hours (we weren’t even being that noisy!). Let’s say the HOA administration purchases expensive perks for its staff, whilst common areas are left in disrepair. They change the rules of the HOA, and owners who entered the association under the old rules have to accept the new rules or move. What to do? “Well you could just move to another neighborhood,” right? But wouldn’t that be similar to the old statist canard about how all libertarians should move to Somalia? Have we simply traded one size of government for another? Even if there were a neighboring HOA which satisfied your preferences, moving is expensive. You have to take days off work, rent a truck, compensate anyone who helps you move, pay closing costs and first month’s rent on a new place, the list goes on. The Pine Meadows HOA has created an onerous situation which leaves one with the choice of either moving at great cost from a home they love, or staying to be predated upon by the nefarious officers at Pine Meadows. “If you don’t like it, move to Willow Glen!” would be the new mantra hurled from the withered visages of the HOA staff and their abettors.

I contend, that in a stateless society, HOAs would be shorn of their ability to oppress the denizens of their neighborhood, and moreover, they would be under far more pressure to satisfy homeowner preferences. I think that HOAs would absolutely exist. But given the widespread dissatisfaction with HOAs, I think they would enjoy a reduced market share of neighborhoods demanding their services. Furthermore, I think that governments keep the smaller tyrannies under them in check to some degree, but those tyrannies have broader latitude under the law to oppress their victims within the bounds set by the overarching government. Absent this government, homeowners would have to take a much more proactive role in determining if the rules of an HOA were to their liking, and would have a greater variety of HOAs to choose from. In an unfettered market economy, HOAs would be incentivized to provide enticing environments to prospective customers, and this would result in HOAs competing for who satisfied their customers the best. I think you would see clauses whereby homeowners would be exempt from any new rules passed by future HOA officers, unless they explicitly agreed to these rules on an individual basis. Fines would likely disappear from all but the most affluent neighborhoods, and liens would be practically nonexistent.

In a stateless society, there would be no state to hold the enormous tracts of land that it currently owns, so HOAs would also have to compete with the most laissez-faire HOA of all, that is, no HOA at all. Some homeowners, finding no HOA that was to their liking, may simply decide to homestead a piece of land and build a home on it. Homeowner’s associations that abused their residents would quickly find their neighborhoods abandoned, their revenue stream decreasing, their officers replaced by those who would attract customers instead of driving them away.

While I do think you would find the occasional abuses, if we look to relatively unregulated sectors of our economy, we find our answer. Mistreatment of customers by employees is not tolerated for an instant. Prices are always falling, and utility obtained by customers is always increasing. As a happy corollary, profits are healthy as well.

I don’t think we’d have anything to fear from HOAs in a stateless society.

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